follow your heart...BUT ask yourself ...is $12 an hour really CHEAP? NO, many people are doing much harder labor for $7.25 an hour BEFORE taxes...(and yes they are considered SKILLED at what they do)
Do you LOVE to make quilts? Would your friend really be able to pay an outrage price like $600 for a quilt? DO you honestly feel she is taking advantage of your friendship....
only YOU know what your true relationship is, and how it stands. Only YOU know what your time is really worth.
Personally I have found that not one person has ever been willing to pay me to make a quilt even at $10 per hour and they supplied all the materials....IF I choose to make them a quilt it is usually for a $150 and they supply everything...which is why I don't do it...I don't have time to do my own stuff..hehehe
lots of varied advise/opinions on this and like I said, only YOU can determine what will be done.